State Chamber offers insights on growing business rankings

Alaska has ranked toward the bottom of several business climate lists over the years, and the Alaska State Chamber of Commerce says this can’t continue.

“I think Alaska should be ranked as one of the best places to do business,” Chamber Board Chairman Kip Knudson told the Juneau Chamber following this week’s legislative fly-in. However, polls have disagreed with this. For example, Forbes named the state as one of the 10 worst for business in 2008, and CNBC recently ranked Alaska last in its list of places to do business. Reasons include Alaska’s poor rankings in categories like cost of doing business, workforce, education, transportation and infrastructure.

“The point is, this is how Outsiders see us. We’ve got to pay attention to this because we get a lot of Outside capital in the state of Alaska, and if they’re looking at us as last we have to change the picture a little bit,” he said.

Knudson spoke on many of these points, such as education, where he encourages improvement because companies want to draw from an educated pool of employees. They also want to offer employees good places to raise families. He said higher education resources are also necessary for recruitment efforts. Still, the Chamber’s big focus is on kindergarten through 12th grade education, including test scores and graduation rates, which led to developing performance scholarships that are now in law.

Knudson said an important thing the State Chamber can do is match up workforce requirements and communicate with the government.

He said transportation was a big factor in the low rankings, especially because Alaska has the worst pavement quality in the country. He said that while the environment is a factor, it’s still something we have control over. To this effect, the State Chamber is encouraging the Legislature to create a state transportation infrastructure.

He said another issue is Alaska is the No. 1 state in unemployment duration, noting, “These things are within our grasp to change.”

Knudson said that, contrary to belief, location and climate is not necessarily a driving part of the low rankings because it’s been observed the best places to do business are also the best places to live, factoring in local attractions, crime rates and health care — areas in which Alaska has ranked highly.

He then described what the State Chamber is doing to help turn these rankings around, including creating the Alaska Coastal Management Program.

“I’ll summarize it as such. There are some communities in the state who don’t think they have enough of a voice in the state’s permitting process, and effectively they want to veto it,” he said. He said the business community insists all communities must have a voice and not veto, as it would hinder developments.

Another priority is taxes, particularly to generate more oil production.

The State Chamber is also working with the Legislature and governor on the regulatory permitting policy.

“Alaska has an extremely rigorous regulatory permitting process. And there seems to be some concern in the state of Alaska that we’re somehow slack or not strict. I think anybody that’s been out there trying to get permits knows it’s exactly the opposite,” Knudson said. “We need to be confident that our permitting program is strong and adequate, and not keep changing it or make it vague and unpredictable for businesses.”

He added the Chamber is also looking at workers’ compensation exclusive liability, which has not been a high priority before. He said it has become a more consistent process since a loophole that allowed more employee lawsuits was closed in 2004. However, there are efforts to reopen that loophole to bring more liability to employers.

Knudson said the climate here is actually quite stable compared to other states, and is more diverse and robust. He said the population increase during the last decade is a good indication of this.

Knudson said he has received a lot of negative feedback from business leaders for highlighting the state’s low ratings, but he feels it is necessary to learn from these ratings in order to make things better. He added it is important for legislators to get involved and actively encourage business prosperity.

“We are looking for leaders. We are looking for advocates. We’re not looking for somebody that says ‘Well, I killed that bill quietly. You just didn’t know about it.’ No, we need people to stand up and say, ‘This is the dumbest idea I have ever heard and it needs to die a painful death.’ That’s the kind of leadership we need to see in Juneau right now,” he said.